The Following Information Relates to Questions
Bond G, Described

question 13

Multiple Choice

The following information relates to Questions
bond G, described in the exhibit below, is sold for settlement on 16 June 2020.
$\begin{array} { l l } \text { Annual Coupon } & 5 \% \\\text { Coupon Payment Frequency } & \text { Semi-annual } \\\text { Interest Payment Dates } & 10 \text { April and } 10 \text { October } \\\text { Maturity Date } & 10 \text { October } 2022 \\\text { Day Count Convention } & 30 / 360 \\\text { Annual Yield-to-Maturity } & 4 \%\end{array}$
-The accrued interest per 100 of par value for bond G on the settlement date of 16 June 2020 is closest to:

• A) 0.46.
• B) 0.73.
• C) 0.92.

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Definitions:

Temporary Difference

A difference between the carrying amount of an asset or liability in the balance sheet and its tax base that will result in taxable or deductible amounts in future years.

Effective Tax Rate

The average rate at which an individual or corporation is taxed, calculated by dividing the total tax paid by the taxable income.

Statutory Tax Rate

The official tax rate set by law that companies and individuals must pay on their income.

Deferred Tax Liabilities

Tax liabilities that emerge from the temporary discrepancies between the accounting and tax valuation of assets and liabilities.